Is the bidding war on trademarks and car insurance keywords about to erupt?

Is the bidding war on trademarks and car insurance keywords about to erupt?

In the online world there is a war on the horizon –not a war with guns and missiles –but a war of words – and to be even more precise, a war about AdWords! For many years there was not much interaction between the legal department and marketing gurus in major companies. It was relatively clear where the boundaries of trademark infringement and unfair competition could be found- but this has since changed significantly!

A battle about search engine results, AdWords and paid searches have revealed how complex the protection of trademarks and intellectual property in the online environment might be! I would like to reflect on this battle and what the possible impact could be on the car insurance industry!

Value of search engine rankings

To understand the importance of this battle we need to reflect briefly on the value of search engine rankings. During the past 10 years many new industries and businesses have been built on the tools provided by the internet, blogs etc.
The success or failure of these online businesses depends on the “find ability” of such businesses.

It is of extreme importance for these businesses to be found easily on search engines such as Google, Yahoo, Bing etc. With this in mind many of these businesses employ search engine optimization specialists to deliver advice and assistance in achieving good search engine rankings. These techniques include quality copyrighting, effective metatags, hyperlinks, and purchase of AdWords etc.

All these techniques are aimed at the delivery of good search results or search rankings. It is important to recognize that the average consumer do not search much further than the third page of Google search results – and if a company and his offerings can only be found much later than the third page – such company is unlikely to attract much business!

Sponsored search results versus normal search results

I have always been a strong supporter of Google – and a believer that the search results found is a fair reflection of quality. In the online world there is a phrase that “Content is King” – and I believe that Google has succeeded in creating a search engine where the best quality of content is recognized and reflected in the results on the first pages.

There is however also a small space above the first “normal” search results – and this is called “Sponsored links”. I am not a strong supporter of these results – and believe that this is the playground of the companies with the big pockets. It is however easy to understand that consumers might be attracted by these sponsored links and that this might provide a significant amount of business to the advertisers.

How much does it cost to gain the top search result?

This exact question was asked and the answer provided in a Google search result. I would like to share a brief and simple version of the answer:

“There is not a specific amount that you can pay to gain the top spot or a specific way to ensure a particular spot.

It isn’t a simple auction. The auction is closest to a CPM (cost per thousand) auction. Imagine that each advert has a specific click through rate. Each advertiser pays so that the CTR times the Average Cost Per Click generates the CPM. Google ranks the adverts with the highest CPM at the top.

What you will end up paying also depends largely on the industry and what you are advertising – and how competitive that market is.

If you are in very competitive market such as “mortgages” or “car insurance” you are likely to have many, many competitors, nearly all of whom will want to be on the first page, if not in the top spot. In this scenario, you are almost certain to have a much higher CPC (Cost Per Click) in order to be competitive in the ‘auction’.”

Litigation and legal battles between corporates about sponsored ads

These top search results or Sponsored links have now become the topic of debates and legal battles. We would like to refer to 2 rather different examples of litigation:

Interflora v Marks & Spencer

A legal challenge has been launched by in Europe by Interflora against department store Marks & Spencer over ads it pays Google to display. Interflora alleges that the department store is unfairly paying Google to place their ads ahead of Interflora’s search results when customers search for the website of Interflora.

Marks and Spencer Group Plc paid Google to have keywords associated with its own flower business on the Google Internet platform. Basically when particular words such as “interflora” are typed in, users would see the Marks & Spencer logo under the search engine’s “sponsored links” section.

Interflora alleges that Marks &Spencer is unfairly stealing its business by paying Google for keyword ad placements. Marks & Spencer defends itself saying that this is industry standard practice and no laws were broken.

It is important to recognize that in this battle Interflora is not suing Google, but rather suing Marks & Spencer for buying search term from Google which it says infringes on its own trademarks.

LVMH v Google

It is also important to reflect on a slightly different case in Europe. The French luxury goods company LVMH accused Google of promoting competing retailers in an unfair manner.

LVMH Moet Hennessy Louis Vuitton SA, the world’s largest luxury-goods maker argued that the promotion of third party retailers through sponsored search results was not legally sound and undermined their brand and business.

LVMH in an important distinguishing characteristic was not losing business since the third-party retailers were still selling its product.

LVHM failed in the court case and Google won in March.

Conclusion and Potential impact on the Car Insurance Industry

The Interflora v Marks & Spencer case will be closely monitored by legal and marketing teams – especially those operating in the highly competitive financial and insurance industries. It is believed that if Interflora wins the battle, it will create a precedent and a number of advertisers are likely to follow suit!

The accusations from Interflora have been referred to as “ambush marketing.” Legal experts will play an increasingly important role in having to protect the intellectual property and trademarks that companies have built up over a number of years and at considerable expense.

In the car insurance industry there will always be a high premium placed on the value of good search results for keywords such as “cheap car insurance” , “best car insurance” etc. No car insurance company would be able to claim these keywords as their own – but there might well be keywords related to specific business models which could justify protection.

Google has not responded to the Interflora case, since it has not been sued in this matter. In a posted blog regarding the LVMH decision, Google however stated that the “user interest is best served by maximizing the choice of keywords” and their “guiding principle has always been that advertising should benefit users.”

We can only hope that the principles of fairness and respect for the Rule of Law will be victorious. There is a place for everyone under the sun and if fair competition in the online environment can assist vehicle owners to find the correct car insurance for their clients – we could ask for no more!!